Question

Krista considers bread and butter to be complements. what would happen if she sees that the price of bread has gone up?

1. the demand for bread and butter would both decrease.

2. the demand for bread and butter would both increase.

3. the quantity demanded for bread would decrease and the demand for butter would decrease.

4. the demand for bread and butter would both be unaffected.

5. the demand for bread would decrease and the quantity demanded for butter would be unaffected.

Answer 1

If the price of bread goes up, the quantity demanded for bread will decrease, and so will the demand for butter, since they are complements.

Step-by-step explanation:

When Krista sees that the price of bread has gone up, and considering that she views bread and butter as complements, the expected economic behavior is that the demand for bread would decrease due to the higher price, causing a decrease in the demand for butter as well, because people will want to buy less butter when they buy less bread. So the correct answer is that the quantity demanded for bread would decrease and the demand for butter would decrease as well, which corresponds to option 3 of the student's multiple-choice question.

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Answer 2

3. the quantity demanded for bread would decrease and the demand for butter would decrease.

Step-by-step explanation:

There's a very important rule when it comes to demand. PRICE CHANGES QUANTITY NOT DEMAND. Given this rule, 1, 2, 4, and 5 can be eliminated because the price cannot change demand. This leaves us with only one answer: 3.

Hope that helps!